What Does it Mean for a Lawyer to Work on a “Contingency Fee Basis?”

If you have a legal problem, you may be able to hire an attorney to handle it with little or no advance payment. With a contingency fee arrangement, you can have legal representation and pay the expenses only after winning the case with a reasonable percentage of a settlement or awarded damages. If the case is unsuccessful, you would not be expected to pay a fee, and in some cases the lawyer may absorb the expenses.

The contingency fee agreement system has a lengthy history in the U.S.; the first “no win, no pay” arrangement has been traced back to the early 19th century and continues today as the number one type of client-attorney relationship in the field of personal injury law. It is a blessing to those people who have been hurt or lost loved ones, and cannot afford a lawyer because of mounting medical expenses, or because they must first bear the cost of a funeral. The contingency fee system provides access to the courts for victims of negligence who cannot otherwise afford to enforce their rights.

While the U.S. provides an attorney for citizens in certain areas of law, it will not cover your legal representation in most civil cases, including a wrongful death or injury case.

Other types of cases that may allow a contingency fee arrangement are:

Employment discrimination

Sexual harassment

Workers’ compensation

in the collection of a large debt

Contingency fee percentage

Using a conditional fee arrangement to hire an attorney is a win-win situation because it motivates the legal team to achieve a speedy outcome and keep costs low, which helps you recover more money faster if your case is one that can be settled efficiently.

A contingency fee percentage is usually decided upon in advance in a contract based on a few factors:

the number of hours and effort required to win the case

the likelihood that someone is legally responsible for your damages

the risk that you may be held responsible for contributing to cause the injury

the probability that your case would win

Sometimes, the contingency fee is set on a sliding scale. A quick settlement or mediation may command a lower percentage, while a lengthier trial would require more legal resources and a higher payment amount.

Is the case strong?

A factor that influences the lawyer contingency fee amount is the probability that your case would win. If the evidence is clearly in your favor, paying an average contingency fee would make sense. If a case is complicated and has an unclear outcome, a contingency arrangement is riskier for the attorney to take on, and may require a higher fee because there is a chance that the lawyer and his or her client may not recover. If the case should be one that does not win, under the contingence fee arrangement, the lawyer could lose all of their time and financial investment in your case.

Selecting an experienced attorney who understands how to evaluate the strength of your case fairly, who can assess a logical contingency fee percentage, and who will coordinate the numerous variables required for you to arrive at a fair and successful outcome, is essential to your case. Choose wisely. The typical contingency fee is a third, or 33%. Sometimes, a lower advertised contingency fee means a lower caliber lawyer who is desperately seeking cases. As they say, you get what you pay for.